Syria's opposition warned on Monday that Hezbollah's role in fighting in Homs province amounts to a "declaration of war," but the militant group said it is merely protecting Lebanese people.

The comments came as a watchdog said the Lebanese Shiite group was leading the battle in the Qusayr area of Homs, which Syrian President Bashar al-Assad has reportedly termed "the main battle" his troops are currently fighting.

"What is happening in Homs is a declaration of war against the Syrian people and the Arab League should deal with it on this basis," said George Sabra, the interim chief of the opposition National Coalition.

"The Lebanese president and the Lebanese government should realise the danger that it poses to the lives of Syrians and the future relations between the two peoples and countries," he told a news conference in Istanbul.

"We hope that the brotherly Lebanese people will raise their voices against against the murder of free Syrians," said Sabra, shortly after his appointment was announced.

"We call in particular on our Shiite Lebanese brothers to stop their sons from going to kill Syrians and becoming victims of the conflict as well," he added.

Hezbollah is a close ally of the Assad regime, but has defended any involvement of its forces in Syria as a bid to protect Lebanese citizens in a string of villages inside the war-torn country.

"What Hezbollah is doing with regard to this issue is a national and moral duty in the defence of the Lebanese in border villages," Lebanon's official news agency quoted senior Hezbollah leader Sheikh Nabil Qauk as saying on Monday.

"To those who ask us to allow our brothers in these border villages to be victims of murders, kidnaps, massacres and expulsions, I respond to you: 'Can we leave these Lebanese hostage to this situation?" he added.

"Hezbollah's martyrs are the martyrs of the entire nation because they are defending their Lebanese compatriots," he said at a ceremony marking a week since the death of a Hezbollah fighter killed in Syria.

Fighting has raged in the Qusayr area of the central province of Homs for days, with regime troops winning control of a series of strategic villages in the area during the weekend.

The Syrian Observatory for Human Rights watchdog said Hezbollah forces were leading the battle in the area.

"It's Hezbollah that is leading the battle in Qusayr, with its elite forces," Observatory director Rami Abdel Rahman told AFP.

"It's not necessarily fighters coming from Lebanon. It's Hezbollah fighters from Shiite villages on the Syrian side which are inhabited by Lebanese," he said.

The area is of strategic importance because it runs along the border with Lebanon and is near the route from Damascus to the coast.

The regime's capture of several villages in the area has raised fears among rebels that the town of Qusayr - an opposition stronghold - could also fall.

At the weekend, Assad himself reportedly referred to the importance of the fighting in the area, calling it "the main battle" his troops were engaged in.

"The main battle is taking place in Qusayr," the Syrian leader told a visiting Lebanese delegation, according to Abdel Rahim Mrad, a former Lebanese MP among the group.

"We want to finish it at any cost and we want to do the same in Idlib," a province on the Turkish border in the northwest which is a major rebel stronghold.

Meanwhile, Defence Minister Moshe Yaalon on Monday implicitly confirmed Israel was behind a January strike on an arms convoy in Syria, saying it had "acted" to stop advanced weaponry reaching "Hezbollah or other rogue elements".

He made the remarks at a joint news conference in Tel Aviv with visiting US Defence Secretary Chuck Hagel.

Violence across Syria on Monday killed at least 95 people, including 29 civilians, 33 rebel fighters and 33 regime soldiers, according to the Britain-based Observatory.

Meanwhile, the European Union offered fresh aid Monday to Syria's opposition, easing an EU oil embargo in favour of the rebels fighting President Bashar al-Assad, but stopping short of supplying offensive weapons.

In a new signal of support, EU foreign ministers meeting in Luxembourg formally adopted measures enabling EU companies on a case-by-case basis to import Syrian crude and export oil production technology and investment cash to areas in the hands of the opposition.

"We want regions controlled by the opposition to develop, we want to help economic reconstruction," said German Foreign Minister Guido Westerwelle on arriving for the talks.

"People will see there is a real alternative to the Assad regime exists."

This first easing in two years of harsh sanctions against Damascus aims to help tilt the balance in the conflict but is a response to complaints by the civilian population that international sanctions are harming ordinary Syrians more than they are the regime, EU sources said.

Though Syria was not a leading exporter of crude, the EU's 2011 sanctions deprived Damascus of much needed cash. Sales of crude provided up to a third of Syria's hard currency earnings, with the EU buying 95 percent of it.

British Foreign Secretary William Hague said as he stepped into the meeting with counterparts that there "is now a humanitarian catastrophe in Syria" and that "this should remain top of our agenda."

Yet worries persist across the 27-nation bloc about the ability of the divided opposition to prevent assistance of any kind from falling into the wrong hands.

Hardline Islamist rebels - including the al-Qaeda-linked Al-Nusra group - notably are in at least partial control of Syria's largest oil reserves in Deir Ezzor in the east and Hassaka in the northeast.

Washington this weekend refused to arm the opposition at a "Friends of Syria" meeting in Istanbul and the same question is expected to again divide EU nations behind closed doors at Monday's talks.

Meanwhile Syrian opposition chief Ahmad Moaz al-Khatib's this weekend decided to step down due to world "inaction" over the killing in Syria, which has left more than 70,000 people dead.

Khatib's colleagues said his decision was motivated by the international community's refusal to provide heavy weapons to the rebels.

But Belgian Foreign Minister Didier Reynders implied it was a fresh instance of internal tension. "We must ask the opposition to be more organised, more inclusive," he said.

Reiterating a position held by the Scandinavian nations, Danish Foreign Minister Villy Sondval said: "We are not in favour of supplying arms."

They might end up in the wrong hands or only further inflame the conflict, he said.

Talks about amending the EU arms embargo are crucial as the bloc's package of wide-reaching sanctions against Damascus is due to expire in a matter of weeks, on May 31.

Britain and France have pushed hard to convince partners to allow weapons shipments to the rebels but a unanimous agreement is needed.

Westerwelle said Monday that Berlin will have no choice but to accept the lifting of an EU arms embargo on Syria if other European countries push for it. Germany previously had opposed providing military support to Syria's rebels.

The bloc recently eased the arms embargo to allow the supply of "non-lethal" equipment as well as "technical assistance" - which includes training - to the rebels.

On the ground in Syria, Assad's forces have made gains in recent days in the Damascus region and in the region of Homs.

Elite fighters from the Lebanese Shiite group Hezbollah, a staunch ally of the Syrian regime, are leading the fight against rebels in the region of Qusayr in the central province of Homs, a watchdog said on Monday.

"It's Hezbollah that is leading the battle in Qusayr, with its elite forces," Rami Abdel Rahman, director of the Syrian Observatory for Human Rights, told AFP.

Over the weekend, Syrian regime forces retook control of a string of strategic villages in the region, which is along the border with Lebanon.

That raised fears among rebels that the town of Qusayr itself, a stronghold of the uprising, could fall into government hands.